Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Cars

New Report Links Homeowners’ Auto Dependence With Foreclosure Risk

Homeowners in car-dependent areas without access to alternative transportation are at greater risk of foreclosure, according to a report released yesterday by the Natural Resources Defense Council (NRDC) that calls for mortgage underwriting standards to begin taking so-called "location-efficiency" into account.

Foreclosure_Rate_Homes_Sale_Chicago_Suburbs_5wKfNDSWQE0l.jpgWeeds spring up near a foreclosed home in Illinois. (Photo: Getty)

The NRDC examined data for 40,000 mortgages in Chicago, Jacksonville, and San Francisco, seeking to test the contention -- emphasized most often by the nonprofit Center for Neighborhood Technology -- that affordable housing should include transportation costs as well as mortgage bills.

And what did the report's authors find?

In all three cities ... statistically sound results [indicated] that the probability of mortgage foreclosure increases as neighborhood vehicle ownership levels rise, after controlling for income. These results suggest that mortgage lenders should include measures of location efficiency in their underwriting to more accurately predict the risk of default.

In addition to including transit access and walkability in mortgage underwriters' measurement of borrowing terms, the NRDC recommended that location-efficiency be formally adopted as a goal for community planners. Particularly in Sun Belt and West Coast areas where waves of foreclosures have prompted new fears of suburban blight, the report suggests that rebuilding neighborhoods with location-efficiency in mind could stave off negative effects from any future downturn in home prices.

NRDC's conclusions are already being heeded by federal officials. Several House Democrats banded together this summer to add language to their chamber's climate bill asking the Federal Housing Administration (FHA) to insure 50,000 location-efficient mortgages.

That climate legislation is stalled for the time being, but the Obama adminstration's deputy housing and urban development secretary said last week that the White House would spend $10 million on research aimed at boosting the issuance of location-efficient home loans.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Friday Video: Why Are America’s Roads and Bridges ‘Crumbling’?

Americas dangerous, crumbling roads are bridges didn't happen by accident — and it's not too late to fix them, the latest Streetcraft video says.

October 4, 2024

Friday’s Headlines Are For Local Control

It's playing out all over the country: A city wants to make a street safer for everyone, only for the state DOT to step in and say no. Learn more about the trend + more stories in today's headlines.

October 4, 2024

Talking Headways Podcast: Transit Themed Rock Music

Meet a band that writes exclusively about the car-free life on public transit. And it rocks!

October 3, 2024

Thursday’s Headlines Are Down on the Corner, Out in the Street

Bring a nickel, tap your feet as you avoid having to get into your car to drive out to the big-box strip mall.

October 3, 2024

Room for Improvement: What New York’s Subway System Can Learn from Cities Around the World

New York’s subway was once an international model of modernity. But it's not anymore.

October 3, 2024
See all posts